CoreWeave shares soared more than 13% in premarket trading Thursday after Citi analyst Tyler Radke upgraded the AI-focused cloud computing company to Buy from Neutral, citing strengthening demand for artificial intelligence infrastructure powered by encouraging signals from Microsoft and Oracle.

Radke maintained his price target of $160, which implies a 55% upside from Wednesday’s closing price. Despite the stock more than doubling since its IPO in late March, CoreWeave had recently slid nearly 45% from its peak, with investor concerns mounting over its $9 billion acquisition of Core Scientific and its heavy reliance on Microsoft, which accounted for 72% of its Q1 2025 revenue.

But Citi now sees the recent pullback as a buying opportunity, bolstered by Microsoft’s strong quarterly results, which included a beat-and-raise on Azure cloud revenue and an increase in capital expenditure. The bullish signals suggest AI demand remains resilient, with cloud giants doubling down on infrastructure investment.

“We come away with a much stronger fundamental view on the demand picture highlighted by MSFT... and raising capex with upside to finance leases,” Radke wrote in the note. “We feel incrementally more confident about the durability of AI demand and CRWV’s position in the market, though still hold some concerns around customer concentration and CoreWeave’s ability to move up the stack.”

Radke also cited Oracle’s recent AI-related cloud announcements as further evidence that hyperscaler demand for GPU-intensive computing remains robust. These developments support CoreWeave’s positioning as a key infrastructure provider in the AI ecosystem.

Still, Citi cautioned that the stock remains High Risk, given its limited trading history and heavy revenue concentration. While Microsoft has been a strong partner, such dependence poses long-term strategic risks, especially if diversification efforts stall.

Nonetheless, Citi believes the dip offers an attractive entry point for long-term investors willing to navigate the near-term risks. With major cloud players reaffirming their commitment to AI expansion, CoreWeave’s deep integration in the infrastructure layer could drive sustained growth